Saad Mirza
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Unfairly treated or fired at work?
April 17, 2025
Top 10 Employment Contract Red Flags
Starting a new job is exciting, but before you sign on the dotted line, it’s crucial to know exactly what you’re agreeing to. We’ve seen firsthand how one poorly worded clause in an employment contract can impact your rights, your pay, or even your ability to work elsewhere in the future.
This article highlights the top red flags we routinely spot in Canadian employment contracts and what you should do if you see them.
Why Employment Contracts Matter
An employment contract is more than just a formality—it’s a legally binding agreement that defines your rights, responsibilities, and future options. Too often, employees assume it’s a standard document and sign without a second thought.
But contracts can limit your ability to make legal claims, restrict your career options, or reduce your entitlements if things go sideways. We’ve had clients come to us after being dismissed, shocked to discover the contract they signed months or years earlier left them with far less severance than they expected.
Canadian law defines workplace harassment broadly. In Ontario, the Occupational Health and Safety Act (OHSA) and the Human Rights Code both protect employees from harassment, including sexual and psychological harassment.
Federally regulated workplaces are covered by the Canadian Human Rights Act, which also prohibits retaliation against those who report harassment.
The Top 10 Red Flags in Employment Contracts
#1. Vague Job Responsibilities
If your contract only broadly describes your role, your employer could later expand your duties—without increasing your pay.
For example, we’ve seen contracts that simply say “other duties as assigned,” which led to our client being assigned tasks far outside their original position. Always ask for a clear, detailed job description.
#2. Non-Compete Clauses
Non-compete clauses may prevent you from working in your field after leaving your job. While these are often unenforceable in Canada, their presence can still be intimidating and may even discourage you from pursuing certain opportunities.
We’ve helped clients negotiate these out or narrow their scope so they don’t block future employment.
#3. No Clear Termination Clause
If you feel safe, let the person know that their behaviour is unwelcome and must stop. Setting boundaries early can sometimes resolve the issue before it escalates.
We’ve seen clients at Thrive Law successfully de-escalate situations by calmly but firmly stating their discomfort. However, if you feel threatened or unsafe, skip this step and move straight to reporting.
#4. Overly Broad Non-Disclosure Agreements (NDAs)
NDAs that prohibit you from discussing anything about your work can silence legitimate concerns or prevent you from seeking advice. Watch for NDAs with no clear time limit or that cover information that isn’t truly confidential.
#5. Probation Period Longer Than 3 Months
In Ontario, the standard probation period is three months. Anything longer can delay your access to job protections and benefits. We’ve helped employees negotiate shorter probation periods or ensure benefits start sooner
#6. Unpaid Trial or Training Periods
Any period where you’re expected to work without pay—unless you’re a true intern—may violate employment laws. All work should be compensated. We’ve seen clients asked to “prove themselves” in unpaid roles, only to be let go without compensation.
#7. Intellectual Property Clauses That Go Too Far
Some contracts claim ownership over any intellectual property you create—even outside of work hours.
We’ve helped clients push back on clauses that would have given their employer rights to personal projects or inventions unrelated to their job.
#8. Contract Says “You Are an Independent Contractor”
Misclassifying employees as independent contractors is a common tactic to avoid paying benefits, taxes, or severance. If your contract labels you as a contractor but your work is controlled like an employee’s, you may be entitled to employee protections under Canadian law.
#9. No Mention of Overtime or Vacation
Your contract should clearly state your entitlement to overtime, vacation, and sick days. Vague or missing language can leave you with less than the minimum required by law. We’ve seen contracts that, intentionally or not, left out these key details—leading to disputes down the road.
#10. “Termination Without Cause” = Minimum ESA Entitlement Only
Many contracts try to limit your severance to the minimum required by the ESA. This is almost always a bad deal, as common law entitlements can be much higher.
We’ve represented clients who, because of this clause, received only a fraction of what they would have otherwise been owed.
What to Do If You Spot a Red Flag
Don’t rush into signing. Ask for time to review the contract, discuss your concerns with HR or the recruiter, and request changes in writing.
Consulting a Canadian employment lawyer—like our team can help you understand the risks and negotiate better terms.
Why You Should Always Review Your Employment Contract
We’ve worked with many clients who suffered real financial and career setbacks because they didn’t review their contracts closely enough. One client was shocked to learn that a “standard” termination clause meant she was entitled to just eight weeks’ pay after years of loyal service.
Another found his non-compete clause so broad that it nearly kept him out of his entire industry for a year. Reviewing your contract isn’t just about avoiding disaster—it’s about peace of mind and protecting your future. A contract that protects only the employer isn’t fair. Take the time to protect yourself before you sign.
Author: Saad Mirza
I’m Saad Mirza, the founder of Thrive Law, a employment law firm dedicated to helping employees across Ontario navigate challenging job terminations and workplace issues.